coindesk.com
To bring an end to the crypto winter and for the crypto sector, and America, to thrive for the long term, crypto must rise to the challenge posed by its fervent critics. These critics are actively working to undermine our viability.
The market cap of the cryptocurrency sector has dropped from over $2.4 trillion in May 2021 to, as we write, $1.09 trillion. More than half.
Adelle Nazarian is the chief executive officer, and Alex Allaire is the co-founder, of the American Blockchain PAC.
The sector's adversaries do not deserve all the credit, or blame, for crypto's price implosion. Yet they aren’t the first to wage political war on the market capitalization of a rival economic sector.
They are delightedly using the price implosion cap as an opportunity to double down on their attacks.
Make no mistake. The crypto sector's adversaries are formidable.
To steal a meme: The Empire strikes back. Time for the return of the Jedi!
We must stand up for crypto in the public relations and policy arenas. We, the authors, are actively making, and call on others to make, the case for crypto. The case for crypto is immense, one of innovation and growing productivity – and the rising tide of equitable prosperity that accompanies that.
We must not and will not allow the enemies of progress to crush this historic wave of innovation.
Meanwhile, they try.
26 experts
In an acidly critical piece in The Los Angeles Times Michael Hiltzik recently observed:
"In an open letter earlier this month, a group of 26 experts urged congressional leaders to take steps to protect the public from these "risky, flawed, and unproven digital instruments." Their letter ultimately attracted signatures from 1,700 scientists and technologists, according to Stephen Diehl, a British engineer who is one of the organizers. The writers said, "We strongly disagree with the narrative – peddled by those with a financial stake in the crypto-asset industry – that these technologies represent a positive financial innovation."
Meanwhile, Ben Schreckinger, at Politico, recently headlined "Bankers Revel in Crypto's Crash":
"Yesterday, when the Bank for International Settlements released its 115-page page annual economic report, it devoted the final third to a detailed takedown of crypto and decentralized finance. The BIS is the most institutional of institutional players – an international organization that acts as a bank for central banks and is also owned by central banks. ... In recent years, papers published under the bank's aegis have gone from dismissive to defensive in their treatment of crypto."
And consider the attacks by the likes of Bill Gates, Jr., who admitted in his book "The Road Ahead," that lost the web for Microsoft (MSFT) by believing that "the technology for 'killer applications' was inadequate to lure consumers to the Internet …"
Gates, driving in his chronic blind spot, recently accused crypto of being based in "the greater fool theory." Notoriously, Gates's bridge partner, billionaire investor Warren Buffett, called crypto "probably rat poison squared."
These attacks drew a blistering riposte from the never-bashful Peter Thiel against the "finance gerontocracy," calling Buffett the "sociopathic grandpa from Omaha."
That said, one blistering insult does not a crusade make.
Read More: The Case for Investing in Bitcoin During Crypto Winter
No disrespect to Thiel: The best defense is a good offense. There's another perspective, one which seizes the moral high ground from crypto's critics. Consider the perspective of crypto's creators as well as its destroyers.
Ethereum’s co-inventor: Vitalik Buterin and his dad "Dima,” also a member of the cryptocenti, provided a very constructive perspective. Speaking with Fortune:
"Vitalik: I think, in general, the luna [cryptocurrency] collapse is in some ways one of these important, kind of healthy moments in crypto reminding people that downsides are real. You can't just build a system and magically pretend that the negative case is never going to happen.
"You can't just worry about what the interest rates look like in the short term, you also have to worry about the fat tails, worry about these really exceptional situations. I think that's insight that's ultimately going to lead to a more stable crypto ecosystem at the same time."
"Dima: This was a very traumatic event for a lot of people losing lots of money. My hope is that we will not be limited to, 'Let's restrict. Let's forbid. Let's stop this.' There are all kinds of consequences ... and lessons we learn from all of that. [But] the lessons can keep moving us forward versus trying to keep us safe."
So, what’s really going on? Capitalism.
Capitalism was characterized by Joseph Schumpeter, one of its greatest theorists, as "creative destruction." Per economist Ricardo J. Caballero writing for MIT, this references "the incessant product and process innovation mechanism by which new production units replace outdated ones ... Over the long run, the process of creative destruction accounts for over 50% of productivity growth."
Read More: Ms. Crypto Goes to Washington
Creative destruction, which makes the public as well as the innovators much better off, is not for the faint of heart. The flourishing of the blockchain sector is not, in the immortal words of Gen. Pete Worden, a "self-licking ice cream cone."
The Empire – legacy finance – strikes back? Cue John Williams.
Now we the Jedi – the guerrilla warriors of Crypto – return.